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FAQs on Principles of Valuation - Civil Engineering Optional Notes for UPSC

1. What are the key principles of valuation?
Ans. The key principles of valuation include the principle of substitution, the principle of anticipation, the principle of contribution, the principle of highest and best use, and the principle of conformity.
2. How do the principles of valuation apply to real estate?
Ans. The principles of valuation help real estate appraisers determine the market value of a property by considering factors such as comparable sales, income potential, and the condition of the property.
3. Why is it important to understand the principles of valuation for the UPSC exam?
Ans. Understanding the principles of valuation is crucial for the UPSC exam as questions related to property valuation, economics, and finance may be asked in various papers such as General Studies, Economics, and Public Administration.
4. Can you provide an example of how the principle of substitution is used in valuation?
Ans. The principle of substitution suggests that a buyer would not pay more for a property than the cost of acquiring a similar property. For example, if a comparable property is available at a lower price, a buyer would likely choose that property over a higher-priced one.
5. How do the principles of valuation help in making informed investment decisions?
Ans. By understanding the principles of valuation, investors can assess the value of potential investments, compare different opportunities, and make informed decisions based on factors such as market trends, risk assessment, and financial analysis.
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